U.S. Stocks Rise for Fourth Straight Day Ahead of Christmas Eve – Will the “Santa Claus Rally” Arrive Tonight?
Every Christmas, investors hope for the same thing: a visit from Santa Claus in the form of a stock market rally — the so-called “Santa Claus rally” in investing circles.
The “Santa Claus rally” refers to the last five trading days of the year and the first two of the new year, when U.S. stocks have historically tended to rise. This year’s window starts tonight, December 24.
Will “Santa” Arrive Tonight?
Year-to-date, U.S. stocks have performed strongly, rebounding steadily from April lows with the S&P 500 repeatedly hitting new records. Despite higher volatility in December, recent days have seen tech stocks regain momentum — fueled by Micron’s confidence-boosting earnings — pushing the S&P 500 to fresh highs.
Many Wall Street professionals say they expect stocks to continue rising over the Christmas holidays, ending the year smoothly and setting a positive tone for 2026.
Louis Navellier, Chairman and CIO of Navellier & Associates, believes current conditions have paved the way for a Santa Claus rally. He notes easing AI trade concerns and strong performance across many sectors.
Navellier highlights recent strength in small-caps, with the Russell 2000 leading gains — signaling rising risk appetite heading into the new year.
“The trend is our friend — 2026 looks set for a strong start, and the potential Santa Claus rally is back on the table,” Navellier said.
Mark Hackett, Chief Market Strategist at Nationwide — the largest U.S. financial services group — is also optimistic about a year-end rally.
Hackett reminds investors that momentum may cool early 2026, but current conditions have much to like.
“The last two weeks of the year are the best-performing period on the calendar since 1950,” he said, adding that since 1928, markets have risen 80% of the time in the final two weeks with an average gain of 1.6%.
Hackett noted: “When this pattern is widely discussed, it can become a self-fulfilling prophecy.”
Bullish on Tech Performance
Clark Bellin, President and CIO of Bellwether Wealth, also expects some volatility but believes the Santa Claus rally is coming.
He said: “Despite recent choppiness, stocks remain range-bound through December, and year-end seasonal strength may be the catalyst needed to break out of the narrow trading range.”
Bellin added his firm expects more tech sector growth in 2026 — and he’s not alone. Paul Stanley, CIO at Granite Bay Wealth Management, sees near-term upside for tech.
He noted: “Low volume and lack of bad news should allow the Santa Claus rally to persist through the rest of 2025 in good form… While tech valuations are elevated, some ‘Magnificent Seven’ names have actually underperformed the S&P 500 this year — suggesting more room to run, and not all tech valuations are out of control or blindly optimistic.”